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Шургина,Мушинская Методичка 4 курс финансы 111.doc
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  1. Read the following texts:

A

People buy insurance to protect themselves against the losses that may result from an accident or catastrophe. For example, a company involved in a major construction project may have all the necessary skills for completing the job but there is still an element of risk. Extreme weather conditions or a natural disaster could damage or destroy the work that has been done. To protect itself, the company can pay a sum of money - a premium - to an insurance company who will underwrite the risk or guarantee to provide financial compensation if such an event occurs. The exact details of this insurance are contained in the insurance policy which is a document showing the risks that have been insured against and the levels of compensation that will be paid.

B

If you are worried about the cost to you or your business of events such as accident, fire, theft or death, then you can take out an insurance policy. You can either go directly to an insurance company or you can talk to a broker, who will help you decide which company has the best policy for you. First you say what you want your insurance to cover, then the broker will tell you which policy he or she thinks you should take out. The broker will tell you how much money or premium you will have to pay for the cover you want, so that you can get money back from the insurer if an accident happens.

If an accident does happen, you make a claim to your broker or to the insurance company directly. If the company agrees to your claim, you receive money. This is the settlement of your claim. In the case of a claim on an assured life, the beneficiary - the person who gets the money when someone dies - is usually a member of the policyholder's family.

A pension plan is another kind of insurance. You pay a regular contribution, for example every month, and when you retire, the company pays you a pension. A company scheme which employees have to join is called a mandatory plan.

Insurance of goods

The export trade is subject to many risks. Ships may sink or collide; consignments may be lost or dam­aged. So, the goods are usually insured now for the full value. The idea of insurance is to obtain indemni­ty in case of damage or loss. Insurance is against risk. While the goods are in a warehouse, the insurance covers the risk of fire, burglary, etc.

As soon as the goods are in transit they are insured against pilferage, damage by water, breakage or leak­age. Other risks may also be covered.

The insured is better protected if his goods are in­sured against all risks. The goods may be also covered against general and particular average.

In the insurance business the word average means loss. Particular average refers to risks affecting only one shipper's consignment.

General average refers to a loss incurred by one consignor but shared by all the other consignors who use the same vessel on the same voyage.

  1. Answer the following questions:

  1. Why do people buy insurance?

  2. What can damage the work of any company?

  3. How is a sum of money that a company pays to an insurance company called?

  4. When can you take an insurance policy?

  5. Who will help you to decide which company has the best policy for you?

  6. Who is broker?

  7. What is a pension plan?

  8. What is a mandatory plan?

  9. What does the word «average» mean in the in­surance business?

  10. What are the names of the biggest insurance companies in Ukraine?